Trico Marine Services Sees Dramatic Increase in 3Q05 Results
Trico Marine Services, Inc. (Nasdaq: TRMA) has financial results for the third quarter of 2005.
- Net income was $8.6 million for the third quarter of 2005, or $0.81 per share (diluted), which represents an increase of 140% compared to the second quarter of 2005.
- Operating income of $15.2 million represents a 68% increase over the operating income of $9.1 million for the second quarter of 2005. Included in both operating income amounts is the benefit of approximately $3.2 million of non-cash amortization of deferred revenue.
- Continued strength in demand accentuated by recent hurricanes in the Gulf of Mexico resulted in charter hire revenues of $43.9 million, our highest quarterly charter hire revenues since the third quarter of 2001.
- As previously announced, the Board appointed Trevor Turbidy as President and Chief Executive Officer and Geoff Jones as Vice President and Chief Financial Officer.
- Subsequent to the end of the third quarter, the Company raised $95.8 million of proceeds, net of underwriting discounts but before offering expenses, from its public offering of 4,273,500 primary shares of common stock.
(In thousands, except per share data and day rates) Three months Three months ended ended September 30, 2005 June 30, 2005 Charter hire revenues $43,872 $39,945 Operating income 15,217 9,054 Net income 8,550 3,565 Diluted EPS 0.81 0.34 Day Rates: Supply / Anchor Handling (North Sea class) $16,637 $16,147 Supply Vessels (Gulf class) 6,367 5,727 Utilization: Supply / Anchor Handling (North Sea class) 92% 89% Supply Vessels (Gulf class) 62% 58%
Trico's President and Chief Executive Officer, Trevor Turbidy, commented, "Our third quarter performance, coupled with the proceeds we raised from our public offering, dramatically improves our balance sheet. After the application of proceeds from the offering, Trico will have $47.2 million in unrestricted cash and $16.0 million in total net debt. In addition, our ability to generate cash flow has improved substantially due to the strength of the OSV markets worldwide."
Trico's revenue and income continued to increase as a result of continued strong demand in each of its key markets. Charter hire revenues for the quarter ended September 30, 2005 increased 10% to $43.9 million on a sequential quarter basis. The increase in charter hire revenue for the third quarter was primarily due to increased utilization and day rates in all vessel classes, which was a result of continued high commodity prices and increased drilling and production activities. In the Gulf of Mexico, day rates were further increased due to work associated with recent hurricanes starting in September. Our Gulf of Mexico utilization for the Company's actively marketed fleet was 94% in the third quarter of 2005.
In October 2005, North Sea day rates averaged $17,139 with utilization of 100% while day rates for the Company's Gulf class supply vessels averaged $7,358 with utilization of 69%, or 98% for all actively marketed vessels.
Operating income was $15.2 million for the three months ended September 30, 2005, after deducting depreciation and amortization of $6.2 million, $2.2 million of expensed marine inspection costs and including the benefit of $3.2 million of amortization of non-cash revenue. This represents a 68% increase over the operating income of $9.1 million for the second quarter of 2005.
Direct vessel operating expenses decreased 13% from $23.0 million in the second quarter of 2005 to $19.9 million in the third quarter of 2005. The decrease is primarily due to reduced marine inspection costs, reduced supplies and miscellaneous costs and reduced pension expense. In both periods, marine inspection costs have been expensed as incurred. Direct operating expenses included $2.2 million of marine inspection costs for the third quarter of 2005 and $3.5 million of marine inspection costs for the second quarter of 2005.
General and administrative expense increased from $5.1 million in the second quarter of 2005 to $6.2 million in the third quarter of 2005 primarily due to consulting fees, compensation expenses, severance costs and an employee assistance program related to hurricanes Katrina and Rita.
The Company emerged from Chapter 11 protection pursuant to a previously
announced plan of reorganization that became effective on March 15, 2005.